davesays300 green

KENTUCKY (8/18/13) – This week Dave discusses "Buying a house with 403(b) money" and "What term does he need?"

 

Dear Dave,
Should I take advantage of a 403(b) withdrawal in order to buy a house? - Bryan

Dear Bryan,
I wouldn’t do that because it really doesn’t accomplish anything. The only money you can take out is what you’ve put in, and any growth you’ve experienced has to stay in there. Basically, it’s a retirement plan, and I wouldn’t monkey around with retirement money to buy a home.

My advice is to make sure you’re debt-free and you have three to six months of expenses set aside in an emergency fund. Once you’ve taken care of those issues, you can pile up a bunch of cash in a money market account toward the purchase of a home. You won’t earn a lot of money, but it’s a safe place to park your cash when you’re saving up for a big purchase.

When it comes to saving and investing, I’m a big fan of mutual funds. The problem in this scenario is that if you start sticking money in mutual funds, then the market is down when you’re ready to buy, you could’ve lost some money. That’s not the route I’d want to go if I’m in your shoes, Bryan. I’d forego the opportunity to make money in order to keep it safe for this goal. - —Dave

Dear Dave,
I’m 24 years old, and I have a wife and child. We’ve been following your plan, and I’m about to buy life insurance. Should I get a 20- or 30-year term policy? - Derek

Dear Derek,
I think the big question is how long will you need this life insurance. If you and your wife are planning on having more kids in the next 10 years, I’d suggest a 30-year policy. That could put you in a situation of being 34 years old with a new baby. That’s not old by any means, but your wife will need 20 years’ worth of coverage if this happens, because you’d want the kids grown and out of the house before the insurance term runs out.

But that’s just one of your financial goals at this point. You also want to be debt-free. And you need to ask yourself some other questions. Are you going to have your house paid for 15 years from now? I sure hope you didn’t take out more than a 15-year mortgage. Are your kids going to be grown and gone by then? Are you going to have a big pile of money in the bank by then? In other words, where are you going to be at the end of the term?

If 15 years from now you have $700,000 in your retirement account, your house is paid for, and the kids are out on their own, then, if you die, your wife will be fine, financially speaking. But at that time, if you still have kids in the house and your home isn’t paid off, then you’d probably need a 20-year policy.

That’s how I would look at it. How much longer are you going to need life insurance? - —Dave

* Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at www.daveramsey.com.


Disclaimer: The content supplied by columnists and letters to the Editor on this site does not in any way, shape or form, implied or otherwise, necessarily express or suggest endorsement or support of any of such content, statement, or opinions therein. SurfKY News does not necessarily adhere to or endorse content provided by outside non-staff sources.

e-max.it: your social media marketing partner

LIKE SurfKY on Facebook - Click here to LIKE us now.

© Copyright 2015 SurfKY News Group, Inc. All rights reserved. This material may not be published, broadcast, or rewritten without permission. SurfKY News encourages you to share this story on social media.

In Other News...

Seven Hills Neighborhood Alliance to Host Yard Sale, Neighborhood Cleanup

OWENSBORO, Ky. (5/24/15) — The Seven Hills Neighborhood Alliance will host its annual Yard Sale Fiesta on Friday and… Read More

AHS, DCHS Earn Silver Awards on U.S. News and World Report High School Rankings

DAVIESS COUNTY, Ky. (5/24/15) — Apollo and Daviess County high schools are among the top high schools in Kentucky as… Read More

Most Read This Week

May 22, 2015 6590

Madisonville Man Charged with First-Degree Rape

by SurfKY News
May 19, 2015 5928

Owensboro Health Proposes Building $15M Health…

by Doreen Dennis, SurfKY News
May 23, 2015 5722

Missing 5-Year-Old Boy Found

by Doreen Dennis, SurfKY News
May 18, 2015 4332

Madisonville Man Wanted for Attempted Murder in…

by SurfKY News
May 19, 2015 3845

Two Charged with Marijuana Possession after…

by SurfKY News

Most Read This Month

May 15, 2015 10537

New Madisonville Business In Full Operation Soon

by Tammy Holloway, SurfKY News
May 15, 2015 7418

Investigation of Local Barber Shop Leads to Drug…

by SurfKY News

Stories Trending Now

May 23, 2015 5722

Missing 5-Year-Old Boy Found

by Doreen Dennis, SurfKY News
May 22, 2015 1292

MPD Seeks Three in Residential Robbery

by SurfKY News
May 23, 2015 1254

Elks BBQ Fundraiser Quick Sell Out

by Tammy Holloway, SurfKY News
May 24, 2015 934

MCC's Felicia Johnson Receives State KCTCS Award

by Tammy Holloway, SurfKY News
May 23, 2015 906

Health Department Food Scores Released

by SurfKY News
May 23, 2015 881

'Cooking for the Cure' Fundraiser Brings Out…

by Tammy Holloway, SurfKY News
May 23, 2015 848

Happenings, Meetings Listed for Following Week

by Tammy Holloway, SurfKY News
May 23, 2015 758

Scientists Meet in Louisville to Share Research…

by Betty Coffman
May 23, 2015 628

Sunday Alcohol Sales Discussion Tabled to Next…

by Charles W. Riley II, SurfKY News
May 23, 2015 591

Kentucky Energy and Environment Cabinet…

by Ricki C. Gardenhire